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Guest Column: Opening up to the new world around us

21-June-2013
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Guest Column: Opening up to the new world around us

A few months ago, Eastman Kodak filed for bankruptcy protection under Chapter 11 in United States Bankruptcy Court in Lower Manhattan. The 131-year old film pioneer faltered in the face of advancing digital world. What is ironical is that it was Kodak’s engineer - Steve Sasson - who actually invented digital cameras (in 1975) and put it back in the closet to focus on what was their core strength - films!

Surely, with a 20-20 hindsight, they should have turned all their energies on to digital films and become a world leader in that. Unfortunately, that wasn’t to happen.

The bookstore chain Borders lost out to online giant Amazon and e-books. Movie rental market leader ‘Blockbuster’ lost out to its online counterpart, Netflix. The Walkman lost out to the iPod. The laptop seems to be losing out to the iPad. Local data on devices such as hard disks seem to be losing out to information on the internet (which has a fancy name called ‘cloud’).

Closer home, our age-old trusted kirana-store owner is facing difficult times. A good part of our groceries for the month get bought in bulk at what are known as modern trade outlets. Only some select few items are then bought from the old kirana store - and that too with the expectation of a near immediate and free home-delivery. Old CRT-based televisions are making way for LCD/ LED TVs. Tailors are making way for readymade garments. Landlines are getting replaced with mobiles; mobile are getting replaced with smartphones.

Lots of changes. Yes. So what?

Here’s the thing: we all know that sooner or later things have to change and the new world order takes over the old one. It becomes imperative for companies to anticipate correctly and re-align their business to capture the market that is coming up in the future. And do it decisively.

For instance, if we are to adapt to the ‘health’ wave, some real questions that leaders of top brands face are: Should McDonalds get into healthier foods and to what extent? When should Pepsi invest serious advertising monies in fruit drinks and related food products? Should Pizza Hut start serving whole-wheat Pizzas; or would Subway quickly overtake them? Should Cadbury launch sugar-free chocolates?

In today’s changing environment, companies in India are faced with a far more critical question: Do I get on the digital and social media bandwagon?

Is digital marketing and social media for real? Does it impact the real India, which goes far beyond the cities? Is it beyond the tipping point in India? Is it going to totally change the landscape of India - not just Indian advertising? Or has it already? And, do I have to take my brand up there or should I wait and watch some more?

Let me start with some statistics: As per a reasonably reliable report from the Indian Internet and Mobile Association (IAMAI), India has crossed 10-crore claimed internet user base. This now constitutes about 8 per cent of India’s population. Is this small percentage of population enough to take Indian advertising over its tipping point (in favour of digital/ internet/ social media)?

I believe, yes it is.

India undoubtedly comprises a vast rural populace with relatively little access to even basic amenities such as potable water and electricity. However, we now have about 65 crore active mobile connections in India (more than half our population). To cater to this evolution of sorts, mobile companies have worked out smart solutions to enable easier ‘charging’ of mobiles. Micromax came up with a mobile that has a battery that doesn’t need charging for a month! That’s how innovative marketers have found solutions to seemingly insurmountable problems. The price points have been pulled to dramatically lower levels than ever before. So, now India is ‘connected’.

Let’s look at what people do with these mobiles: they are downloading songs, listening to jokes, horoscopes and more. And here’s another excellent innovation, where consumers can listen to jokes without having to pay for it: sponsored jokes! One could now give a missed call on a 1-800 number and get a call back, which is an ad followed by a joke.

The urban landscape too is changing. Haven’t we ‘urban dwellers’ in India become far more comfortable about using our credit cards on the internet than ever before? Marketers, on the other hand, have done their bit by providing the option of cash on delivery. One only needs to look at the sudden surge of e-commerce in India - almost reminiscent of the internet boom during the early 2000s. Flipkart, Snapdeal, Flickr – to name a few. Payment of utility bills has moved online. Banking has made deep strides in the online world. And one must not forget the success of the online travel business. And Shaadi.com. The Indian Government has also done its bit in relation to online options: Railway reservations, tax payments and a host of other services.

The digital world is, therefore, all around us and there’s no escaping that. And so is the need for digital marketing, including the new social media universe. And if that be true, there’s no escaping the fact that marketing has no other option than to move in that direction. We are a reflection of what transpires around us in the society, aren’t we? (In fact, currently, media seems to be ‘driving’ social change. But that’s a different story altogether.)

Let me also share my two bits on the key question that a lot of pan-India brands face: would social media be worthwhile even for brands that go far beyond urban India – such as Lifebuoy, Nirma, Dettol, Colgate, etc.? In my view - admittedly with limited experience - it would. Urban India is connected with rural India through places that act as connecting bridges. Also, with growing education, you have smart kids from remote villages straddling the path from their homes to San Francisco no less. Lastly, with a slow but surely steady increase in penetration of electricity and internet in India, there’s a lot that consumers will expect from the brands. They will expect to be part of the conversation with the brand, quite unlike the unidirectional communication approach of traditional media.

So, all in all, the Internet is here to stay. So is digital marketing and social media. I am placing my chips there. Are you?

Ravikant Banka is CEO of Eggfirst.

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